SBDC e-news – August 2016 Collective bargaining

Collective bargaining – know the rules

The Australian Competition and Consumer Commission (ACCC) has issued a new guide for small business owners and farmers on the potential benefits of collective bargaining.

The SBDC has long championed the idea of small businesses pooling resources to win major contracts in their local region, but collective bargaining is a different concept.

A collective bargaining arrangement allows two or more competing businesses to jointly negotiate with a supplier or a customer for the supply or purchase of goods or services.

When the ACCC is satisfied that the arrangement provides an overall public benefit, it can allow conduct which may otherwise be prohibited by the Competition and Consumer Act 2010. (eg cartel behavior.)

The ACCC guide provides basic information about collective bargaining and collective boycotts, some important issues to take into account if you’re thinking of working with another business, and an outline of the ACCC approval process.

Small Business Commissioner, David Eaton says there’s merit in small businesses looking at collective bargaining as a means of increasing participation.

“There are many aspects of a negotiation that could benefit from a formal collective bargaining agreement, including delivery arrangements, volumes, economies of scale and volume rebates,” Mr Eaton said.

“By joining forces, businesses can often negotiate more competitively over terms, conditions and prices.”

According to ACCC Deputy Chair Dr Michael Schaper, by working together, small businesses may be able to negotiate better terms and conditions with large businesses, than they could achieve on their own.

For more information about collective bargaining visit accc.gov.au